Wednesday, April 29, 2015

Puzzling in America

Barro: "...you could have a gradual decline in hours worked per week by a full-time employee and a gradual decline in the number of years that people participate in the labor force and that would do a lot on the labor supply side to deal with declines in labor demand..."

Delong: "And in America it's puzzling we haven't... right? That we've been stuck at forty hours a week as full time or so since world war II even though there's been 75 years since then..."

Writing in Fortune magazine 61 years ago, Daniel Seligman predicted achievement of the four-day week by 1980. He based that prediction on projection of historical trends. It didn't happen.

The future of work has a chequered past.

"And in America it's puzzling we haven't... right?"

Wrong. It's only puzzling if you don't know anything about the role of American economists in opposing, castigating and ridiculing proposals for work time reduction ("economists call it the lump of labor fallacy -- the idea that there is only a fixed amount of work to be done").

Larry Summers remembers: "when I was an undergraduate at MIT in the 1960s there was a whole round of concern about this -- will automation displace all the employment? And what I was taught as an undergraduate was that basically the people who thought it would were a bunch of idiot Luddites and that obviously there would eventually be enough demand and it would all sort of work itself out, and if people got more productive they'd be richer and they'd spend and maybe we needed some transition assistance, but that it was all basically going to be okay. That was what I was taught."